Proposed Reforms to the

Erie County Water Authority

Mark C. Poloncarz
Erie County Executive
 The Erie County Water Authority –
How and When Was it Created?

 The Erie County Water Authority is a legal construct of the State

of New York.
 Its concept was discussed in 1949 and legally created in 1950 by
the New York Legislature through the passage of New York
Public Authorities Law § 1050 of New York Chapter Laws 804
(1950).
 At the time the Erie County Board of Supervisors was required to
“approve” the creation of the Authority through the passage of
a home rule message, which was requested at the March 10,
1950 meeting of the Board of Supervisors.
 At the time of creation the Erie County Board of Supervisors,
New York Assembly, Senate and Governor (Thomas Dewey)
were controlled by the same political party – Republican.
 The Erie County Water Authority –
Why is it Governed by Only Three Members?

 The Authority’s enabling statue provides that it “shall

consist of three members, all of whom shall be
residents of the county. Not more than two members
of said authority in office at any time shall belong to
the same political party.” Each member serves for a
three year term.
 Upon review of other New York water authorities it
appears only one other authority – the Niagara Falls
Public Water Authority – is governed by a 3 member
board. All others are governed by larger boards.
 The Erie County Water Authority –
Comparison of Board Size to Other Authorities.

Authority Size of Board

Albany Municipal Water Finance Authority 7

Buffalo Municipal Water Finance Authority 7

Cayuga County Water and Sewer Authority 9

Clifton Park Water Authority 5

Dutchess County Water and Wastewater Authority 8

Erie County Water Authority 3

Livingston County Water and Sewer Authority 7

Monroe County Water Authority 7

New York City Municipal Water Finance Authority 7

Niagara Falls Public Water Authority 3

Information courtesy of the NYS Authorities Budget Office

 The Erie County Water Authority –
Comparison of Board Size to Other Authorities.

Authority Size of Board

Onondaga County Water Authority 5

Orange County Water Authority 7

Rensselaer County Water and Sewer Authority 5

Saratoga County Water Authority 7

Suffolk County Water Authority 5

Upper Mohawk Valley Regional Water Finance Auth. 5

Water Authority of Great Neck North 8

Water Authority of Southeastern Nassau County 5

Water Authority of Western Nassau County 9

Wayne County Water and Sewer Authority 9

Wilton Water and Sewer Authority 5
Information courtesy of the NYS Authorities Budget Office
 The Erie County Water Authority –
Why is the Appointment of Members Political?

 The Authority’s enabling statue provides that it “shall

consist of three members, all of whom shall be
residents of the county. Not more than two members
of said authority in office at any time shall belong to
the same political party.”
 Upon review of other New York water authorities it
appears only one other authority has a similar
requirement regarding the political makeup of the
members of said authority – the Monroe County
Water Authority – which was also created in 1950.
 The Erie County Water Authority –
Why is the Appointment of Members Political?

 Under the Enabling Act, the Chairman of the Board of

Supervisors appoints members “pursuant to nominations
in writing by the majority, respectively, of the supervisors
of each political party represented on such board of
supervisors, subject to confirmation by a majority of such
board of supervisors.”
 Thus, since its legal creation the Erie County Water
Authority has been a political construct – it was created
during an era of one party rule at the state and local level
and members are mandated by law to be recommended
and appointed pursuant to political parties.
 The Erie County Water Authority –
Do Other Locally Appointed Boards
Have Political Requirements?

 No, except for one board – the Erie County Board of

Ethics. The Board of Ethics has a requirement to
prevent one party control of the Board.
 No other boards appointed by the legislature or
county executive have a political appointment
mandate. The Buffalo and Erie County Public Library,
SUNY Erie, ECMCC, ECIDA, NFTA and smaller advisory
boards all state the term of service for appointees but
none of them require a certain political constitution.
 The Erie County Water Authority –
Can the Authority be Dissolved?

 Yes. The Erie County Water Authority’s enabling

statute provides “the authority and its corporate
existence shall continue for a period of twelve years
from…1949, and thereafter until all its liabilities have
been met and its bonds have been paid in full … and
thereupon all rights and properties of the authority
shall pass to and be vested in the County of Erie.”
 Legally there is a mechanism to dissolve the
Authority, but that only leads to the next question…
 The Erie County Water Authority –
Should the Authority be Dissolved and What is the
Legal and Financial Impact on the County of Erie?

 Just because the Authority can be dissolved does not

answer the questions should it be dissolved and what are
the legal and financial impact to the County.
 Erie County would have to pay off all debt of the Authority
BUT…
 Because other areas of Erie County have their own water
service (i.e. Buffalo) these areas would have to be
segregated out so those residents are not forced to pay
for the debt to fund a service they do not receive. A new
Water District would need to be created and all bonds
issued to pay down ECWA debt would have to come from
the residents and water users living in that district only.
 The Erie County Water Authority –
Should the Authority be Dissolved and What is the
Legal and Financial Impact on the County of Erie?

 According to various reports, the Erie County Water

Authority owes $42,968,384 in total debt.
 The Erie County Water Authority –
Should the Authority be Dissolved and What is the
Legal and Financial Impact on the County of Erie?
The Erie County Water Authority Does NOT
Provide Water Service to the Entire County.
The following areas are EXCLUDED by its
Enabling Law:
 City of Buffalo
 Town of Tonawanda including Kenmore
Additionally, other areas of the county are
not serviced by the Authority. As such, a
new special water district would have to be
created and only the users of the service in
that district, and other users who live
outside of the district but currently purchase
Authority water under leased managed and
bulk sales, would be responsible for the
payment of debt for the takeover.
 The Erie County Water Authority –
Should the Authority be Dissolved and What is the
Legal and Financial Impact on the County of Erie?

 Based on conversations my office has had with

representatives of the NYS Authorities Budget Office,
some, and perhaps all, of the currently outstanding ECWA
debt can only be prepaid upon the payment of a 10%
premium for the then outstanding value of the bonds,
thereby increasing the total cost by millions which will be
paid by the ratepayers in the new special district.
 Early payment of the bonds by the county will be costly,
requiring significant legal hoops to jump through, and the
issuance of new bonds by the county.
 The Erie County Water Authority –
Should the Authority be Dissolved and What is the
Legal and Financial Impact on the County of Erie?

 In addition to issues related to the prepayment of

ECWA bonds, and the cost structure of new bonds
issued, other major issues exist including:
 Termination and Renegotiation of Labor Contracts;
 Long-term costs associated with retiree benefits
(healthcare and pension) that the county would
assume (could be tens to hundreds of millions); and
 Civil Service Issues regarding job titles and seniority,
among other less significant but real issues.
 The Erie County Water Authority –
Political Football Where the Game Never Ends.

 Since its creation the Erie

County Water Authority
has been a political
football because only two
members – both from the
same political party –
control its operations.
 The control of the football
is kicked back and forth
between the Democratic
and Republican Party
depending on which party
controls the Erie County
Legislature, which is the
successor legislative body
to the Board of
Supervisors.
 It’s time to take the
football away from them.
“What can I do when both parties insist on kicking?”, Judge magazine, 1889
 The Erie County Water Authority –
Dissolution or is there a Better Option?

 Dissolution is a real option but also has real financial

and other ramifications and will take months, to
possibly years to effectuate.
 If the goal is to eliminate the political influence and
ensure the Erie County Water Authority is a
transparent and open organization options exist
other than dissolution, including modification of the
Authority’s enabling statute to better meet the
expectations of a government in 2018.
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

 To eliminate political control and continual change of

leadership one must increase the size of the board so that
two people, both from the same political party, do not
control the Authority. Additionally, changes must be made
to ensure it is accountable and transparent to the public.
 These changes can be done without dissolution but by
amending the statute governing the Erie County Water
Authority, the same statute that currently perpetuates the
political nature because it was created at a time of one-
party rule.
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

1) Increase the size of the Erie County Water Authority’s

Board to seven (7) members with appointments made as
follows:
 Two (2) by the Governor;
 Two (2) by the County Executive (not subject to legislative
confirmation); and
 Three (3) by the County Legislature (not subject to county
executive approval) with no more than two (2) members
appointed by the Legislature coming from the same political
party (in effect the existing commissioners) and then NO
requirement as to political makeup when the terms of these
original members expire.
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

2) Increase the term of office for all members to five

(5) years and following passage of the new law
stagger initial appointments so that legislative
appointment terms are up in years one, three and
five, and one county executive and one
gubernatorial appointee are up each in years two
and four, and then all terms thereafter being five
years.
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

3) Currently the Erie County Water Authority’s enabling

statute (§ 1070) requires the Authority to annually submit
to the legislature and comptroller a detailed financial
report. This should be amended to compel the authority
to present not only financial reports but also reports of
operational activities, including the hiring and
termination of employees and contracts entered into
with third parties for any goods or services, on a
quarterly basis and to include the county executive as a
party to receive said reports.
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

4) The Authority’s Enabling Law should be amended to compel it

to annually provide to the Legislature, County Executive, and
Comptroller, a six (6) year capital plan to address issues of
infrastructure needs, including, but not limited to, replacement
of infrastructure, and expected, if any, bonds or other
investment instruments to be issued on the Authority’s behalf.
5) Four (4) members of the Board shall constitute a quorum for a
meeting and four (4) members must vote in favor of an action
for it to be deemed accepted regardless of how many attend
the meeting (majority of members present would not
constitute a voting majority in situation where only 4 or 5
members are present).
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

6) The Authority’s Enabling Law should be amended to

compel the Authority’s Executive Director and
Chairperson to hold a public meeting at the Chambers of
the Erie County Legislature to hear the concerns of the
public and take questions from the public on a quarterly
basis, two meetings of which must be held between the
hours of 6 pm and 9 pm.
7) Prohibit the Authority from entering into any
employment contract for a period greater than five (5)
years and prohibit any employment contract from having
“golden parachute” provisions.
 The Erie County Water Authority –
Amend the Authority’s Enabling Statute.

8) The Authority’s Enabling Law should be amended to

compel all members of the board, as well as all
officers and department/division heads of the
Authority, to submit annually a report pursuant to
Erie County’s Code of Ethics to the Erie County
Board of Ethics and make them subject to any
findings or fines. Currently the Authority objects to
filing these reports.
9) Reduce the stipend paid to commissioners from
$22,500 to $7,500.
 Proposed Reforms to the
Erie County Water Authority

Mark C. Poloncarz
Erie County Executive